The main panel at this week’s NCTA show in Atlanta had all the major heavy-hitters.
There were the heads of the two main cable operators — Brian Roberts of Comcast and Richard Parsons of Time-Warner. There were the heads of the two largest equipment makers — Ed Zander of Motorola (which now owns General Instrument) and John Chambers of Cisco (which now owns Scientific-Atlanta). There was Anne Sweeney of Disney Networks, representing the content side of the business.
And there was Gary Forsee of Sprint/Nextel.
Not only was Forsee on the panel (which of these things is not like the other) but his technology was the main topic of discussion. Even after the group repaired to its press conference behind the curtain he was the center of attention, showing off a new "Blackberry-killer" phone to the other panelists, who held their own private geekfest before they started taking questions. (All top execs these days are Blackberry addicts — it’s the hot new addiction.)
Why was this? Sprint Nextel had just signed a re-sale agreement with four of the largest cable operators, including those of Roberts and Parsons. And what is the key word in the last sentence?
Re-sale.
Sprint, alone among the major telecomm players, has hitched its wagon to the wholesaling star. And by every account I can come up with, it’s working. Sprint/Nextel is now an $80 billion company, which is close to what AT&T is paying for BellSouth, but unlike BellSouth it’s growing.
Want proof?
Here we see a chart of how Sprint-Nextel stock has fared over the last two years, against that of AT&T (formerly SBC) the outfit buying BellSouth.
Notice something?
That’s right. The company that wholesales is growing faster, in terms of its share price, than the one which refuses to.
AT&T has spent literally millions upon millions of dollars to "win" the right not to wholesale its service, while a smaller company that decided to do just that is growing like gangbusters.
Sprint has a bunch of wholesale customers. It is making Richard Branson even-richer (think billions) because he has agreed to sell his Virgin Mobile outfit to NTL Cable of England — all Virgin Mobile was doing was re-selling Sprint services. Disney has ponied-up the bucks to wholesale Sprint capacity through ESPN and directly. Now the cable guys.
Is anyone at those other companies noticing? You can’t serve all customers as one brand. Let experts in marketing and customer relationships do that, stick to your knitting, and you can prosper.
Is there any chance these Verizon or AT&T suits are going to respond positively to this reality?
No.
That is the biggest business scandal of our time.
I think Sprint has really benefited from their decision, around the turn of the milenium, to focus primarily on wireless. It’s not that wireless is some how inherently better than wired, but it allowed them to move away from the “Bell” mentality that still holds sway over Verizon and AT&T. At this time people who are best at doing the Bell-thing have taken it about as far as they can (short of reforming Bell) through the acquisition based growth of Verizon and AT&T. I think in the coming years, Sprint’s (relatively) innovative way of thinking will take them past those two competitors and you will see a changing of the guard at AT&T and Verizon as they try to adapt.
I think Sprint has really benefited from their decision, around the turn of the milenium, to focus primarily on wireless. It’s not that wireless is some how inherently better than wired, but it allowed them to move away from the “Bell” mentality that still holds sway over Verizon and AT&T. At this time people who are best at doing the Bell-thing have taken it about as far as they can (short of reforming Bell) through the acquisition based growth of Verizon and AT&T. I think in the coming years, Sprint’s (relatively) innovative way of thinking will take them past those two competitors and you will see a changing of the guard at AT&T and Verizon as they try to adapt.